Vibhava Chemicals

VIBHAVA CHEMICALS :
PURSUIT OF A CLEANER SPACE

ABOUT COMPANY
Vibhava Chemicals was situated in an industrial area on the outskirts of Hubli in the state of
Karnataka, India. The company manufactured and marketed the Black Belt brand of black phenyl and
the Ozone brand of herbal floor cleaners in the cleaning agents market, and the Monkey brand of
brooms in the cleaning aids market. Vibhava Chemicals is a leader in black phenyl group in the
House Cleaning Agents (HCA) marketplace in South India
The case talks about the various strategies they adopt to maintain & grow in the market & the
problems they are facing in the market sales due to various factors which will be discussed.
VIBHAVA CHEMICALS TIMELINE
1989 2003 2009
Commenced The growth rate ‘Kloract’ launched-
operations declined to 5% chlorine based floor
Introduced Black Belt ‘Ozone’ was introduced cleaner
1995 2000 2011

Distribution across Achieved sales
Karnataka
Market Leader,
Entry of MNC giants turnover of INR 520
Planned to enter Bangalore million
1996 1998
White Phenyl, Expanded to Tamil
Bleaching Powder Nadu, Goa,
added to portfolio Maharashtra
VIBHAVA CHEMICAL PRODUCT LINE
Target Market:
Institutional Markets (Markets that buy goods and services to produce goods and services of
their own) Include:
○ Hotels
○ Hospitals
○ Corporate Offices
○ Schools
○ College Canteens
○ Public Properties such as Railway Stations Etc.
5
Target Market:
Urban Indian Market: Branded cleaning products accounted for 50% of the Urban Indian
Market by value in 2010. In addition to this, National Brands of cleaning products made up
40%, regional brands made up 5% and local brands made up 5%.
The South Indian market reflected a deeper penetration of the specialty HCA category,
accounting for as much as 60 percent of the urban market.
Rural Indian Market: Due to increase in Hygiene consciousness, the Rural Consumers (70% of
India’s total population) that was used to the usage of generic forms of bleaching powder and
acids, constituted 25% of total Indian HCA market.
●
6
Consumer Behavior:
● Urban Indian Consumers were used to Chemical agents such as acid, phenyl and bleaching powders
for cleaning floors and toilets.
◆ Acid- Used for stubborn stains on floors, toilets and sinks.
◆ Bleaching Powder- Used for kitchen areas and laundry cleaning.
◆ Phenyl- Major shares of the market was owned by Phenyl based products, which because of their
pungent smell was mixed with water for usage.
● After the entry of the MNC’s in the urban market, focus of consumers shifted from traditional
cleaning agents to specialty cleaning agents.
Urban HCA market focused on 3 kinds of benefits:
◆ Deodorizing
◆ Disinfecting
◆ Cleaning
● Each kind of product was used for different areas of the house and even though homeowners purchased
the products, it was the domestic employees that used them.
7
ENTRY OF MNCs
HCA Brands Market Shares

70 65.7 15
64.8
66.3 64.6
60 14.5
14.4 14.4
50
14
40 13.7
13.5
30
13
20 12.8
10 8.2 8 8.2 8.2 12.5
0 12
2012 2013 2014 2015
Harpic (Reckitt Benckiser Group Plc (RB)) Sani

Fresh
Domex (Unilever Group)
Kiwi Kleen (SC Johnson & Son Inc) Mr
Muscle (SC Johnson & Son Inc) More
Brands (Private Label)
Others
Vibhava’s Success Profile
To strengthen the
position of the
brand they
Introduction of replace the word
promotional Distribution ‘black’ with
schemes to of product ‘strong’ phenyl.
attract more through
large
distributors and networks of
retailers retailers &
distributors
Positioning
product as a
Introducing vegetable, organic,
white phenyl deodorizing clean
& bleaching
powder. floor.
SWOT Analysis Vibhava Chemicals
· Strengths
The financial 0 Weaknesses
statement of Vibhava
Cleaning looks strong and 2 Low net profit for ozone
compare to other chlorine-
will help the company based MNC Products.
going forward. Exhibit 10
0
Good distribution · High variable cost of the
channel. 1 product. Exhibit 10
SWOT
Threats 0 Opportunities
· Presence of top MNC 3 Unexplored market-
rival firms. Vibhava is only present in the
southern states, so they can
Top quality marketing 0 explore new urban and rural
and advertising strategies
by rival firms like domex. 4 markets in northern and
western regions.
PESTEL ANALYSIS
POLITICAL :
Vibhava Chemicals pursuit of a cleaner space can use government assistance and grants for purposes of
growing the business, advancement,exporting,and innovative work. Demographic shifts in the economy are
also a good social indicator for Vibhava Chemicals to predict not only overall trend in market but also
demand product among its core customer segments.
ECONOMICAL:
Higher inflation will disintegrate the the purchasing power of the consumer and the shopper. Higher
inflation will also harm the costs of raw materials and other inputs that are utilised by Vibhava Chemicals
Pursuit of Cleaner Space.
SOCIAL:
Companies like Vibhava Chemicals are expected to become more consumer-centric than product-centric.
Similarly, market segmentation and consumer grouping are dynamically moving towards measures
psychographics and lifestyles.
PESTEL ANALYSIS
TECHNOLOGICAL:
The expansion of the internet and online business has discarded many intermediaries. It can
communicate and retail directly to consumers now, or through modern intermediaries such as e-
Bay as well. It may also current social network to retail and use e-commerce to boost sales.
ENVIRONMENTAL:
Vibhava Chemicals may use environmental issues to adjust financial, natural and social
performance. Concerns towards the environment will enhance the business image for Vibhava
Chemicals.
LEGAL:
Intellectual property rights are one area where Vibhava Cleaning can face legal threats in some of
the markets it is operating in.
PROBLEM ANALYSIS
● Around the 2000’s, numerous MNC’s emerged in a new category of specialty cleaning
agents, that were packaged in a beautiful manner to make it appealing.
● They attacked the black phenyl market with high decibel media campaigns that led to
the segmentation and gradual expansion of the HCA markets in terms of application.
(Floor cleaning agents were different from toilet cleaning agents) By 2003, this led to
consumers in urban India to shift away from use of phenyl to use of MNC brands for
home cleaning.╸ that were packaged in a beautiful manner to make it appealing.
● They attacked the black phenyl market with high decibel media campaigns that led
to the segmentation and gradual expansion of the HCA markets in terms of
application. (Floor cleaning agents were different from toilet cleaning agents) By
2003, this led to consumers in urban India to shift away from use of phenyl to use
of MNC brands for home cleaning.
● Vibhava's share in the growing home cleaning market dropped from 25 per cent in
a predominantly traditional product market in the 1990s, to 11 per cent in the
transformed market of 2010.
● Even though the sales of “Ozone”, grew in absolute terms, they now faced the
daunting challenge of meeting an ambitious sales target of INR1 billion for
2011/12, which was double the sales of the previous year.
SOLUTION OPTIONS
● Intensify promotional efforts for Ozone floor cleaner
● Launch chlorine-based floor cleaners similar to the MNC brands at aggressively low prices
● Introduce a powerful phenyl-based cleaner and disinfectant for toilet cleaning
● Introduce other product categories like liquid detergents for washing machines — a new
concept for the Indian market
● Expand the market geographically to include new urban and rural markets
16
Recommendations from our Team
• We would like to recommend the fifth option suggested by Gambhir as the most viable one “expanding the
markets to reach out to more urban and rural customers”
● Company can search for new customers among three groups
● those who might use but do not (market penetration strategy)
● those who have never used it (new market segment strategy)
● those who live elsewhere (geographical expansion strategy)
● Expand to various rural markets where maintaining personal hygiene was a concern
● Make use of more distribution channels and strategies
• Additional recommendations
● Proactive marketing : Discover the solutions consumes did not ask for but to which the firm enthusiastically respond
● Partnering with Government and NGOs
● Improve promotional and marketing strategies
● Product modification : Stimulate sales by improving quality, features or style
● Consistently conduct demonstrations during consumer exhibitions
17

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VIBHAVA CHEMICALS :

PURSUIT OF A CLEANER SPACE

1995 2000 2011

HCA Brands Market Shares

10 8.2 8 8.2 8.2 12.5

Harpic (Reckitt Benckiser Group Plc (RB)) Sani

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